The Hindu : Business : Ashley Alteams’ Cheyyar facility on stream

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Thursday, Jan 21, 2010
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Ashley Alteams’ Cheyyar facility on stream

K. T. Jagannathan

To produce high pressure die cast components; sees significant export potential

Initial capacity will be 7,000 tonnes
To focus on auto, telecom segments

R. Seshasayee

CHENNAI: The Cheyyar facility of Ashley Alteams India Pvt. Ltd., a joint venture between Ashok Leyland and Finland-based Alteams Oy, to make high pressure die cast components, has formally gone on stream on Wednesday.

Addressing a press conference at the Cheyyar factory, R. Seshasayee, Chairman, said the initial investment in the facility was Rs. 130 crore. This would go up to Rs. 300 crore in five years. He said that the plant would have an initial capacity of 7,000 tonnes, which would be scaled up to 10,000 tonnes progressively.

Mr. Seshasayee said the initial installed capacity of the plant would generate annual sales of Rs. 180 crore. Once the expansion took place, it could fetch sales of Rs. 500 crore in five years, he added. He said the joint venture was also funded by Finnfund, set up by the Finnish Government to encourage Finnish business projects outside Finland. Mr. Seshasayee said the participation of Finnfund “has raised the stature of the joint venture”. While declining to divulge the financing details of the project, he said some Indian banks too have financed the project on ‘softer terms’. Mr. Seshasayee said Ashley Alteams would focus on two fast-growing segments — telecom and automobile. With the global auto OEMs (original equipment manufacturers) going through tough times in terms of profitability, there was “significant export potential” for the company. For Alteams, it is a way to hedge itself against the cyclical nature of the business from the telecom industry.

The entry into automobile space through this joint venture could bring the Finnish group lot more stability in business. For Ashok Leyland, the joint venture is a ready-made supply source for HPDC components.

S. Rajagopalan, CEO, indicated that the joint venture could also look at exploring other niche industries such as the defence. In this context, Mr. Seshasayee said Ashley Alteams could also look into opportunities in the aerospace field.

Petteri Wallden of Alteams said the Finnish company was serving the HPDC component needs of the Indian telecom infrastructure companies from its plant in China.

With the joint venture going on stream, the needs of the domestic telecom infrastructure companies would now be serviced from Ashley Alteams, he added.

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